Insurance Concepts

Category: Objective Test
Type: Individual


60-minute test administered during the NLC.

Objective Test Competencies: Insurance Principles; General Insurance Concepts; Automobile, Homeowners, Renters, Property, & Liability Insurance; Life, Health, & Disability Insurance; Legal Concepts; Compliance & Operational Risk; Assessing & Transferring Risk; Careers; Ethics in the Insurance Industry

Skills: This event provides recognition for PBL members who demonstrate an understanding of and skill in basic insurance principles and procedures.


Objective Test

Objective Test Guidelines

  • No materials may be brought to the testing site.
  • Electronic devices must be turned off and out of sight.
  • Financial calculators may be used for accounting, finance, and analysis & decision making events; calculators will be provided for all other events.

The general event guidelines below are applicable to all national competitive events. Please review and follow these guidelines when competing at the national level. When competing at the state level, check the state guidelines since they may differ.


  • Dues: Competitors must have paid PBL national and state dues by 11:59 p.m. Eastern Time on April 15 of the current school year.
  • NLC Registration: Participants must be registered for the NLC and pay the national conference registration fee in order to participate in competitive events.
  • Deadlines: The state chair, or designee, must register each state competitor on the official online entry forms by 11:59 p.m. Eastern Time on the second Friday in May.
  • Each state may submit three (3) individuals in all events requiring only objective tests and two (2) individuals or teams for all events that require a pre-judged or performance component.
  • Each competitor can compete in two (2) events.
  • Each competitor must compete in all parts of an event for award eligibility.
  • A team shall consist of two or three members. Exceptions are Parliamentary Procedure which must be a team of four or five members, and LifeSmarts which must be a team of two members.

Repeat Competitors

Competitors are not permitted to compete in an event more than once at the national level unless one of the following circumstances applies:

  • Modified Events: A competitor may compete in the same event when the event is modified. Note, if the only modification is a name change, competitors may not compete in the renamed event.
  • Team Events: One (1) competitor of the team may have competed in the same event at one (1) previous NLC; however, they may not compete more than twice in the event at the national level.
  • Chapter Events: Competitors may compete in a chapter event more than once (Community Service Project).
  • Individual Entry: A competitor who competed as an individual entry in a team event at the national level may compete in the same event a second time as part of a team, but not a second time as an individual.
  • Parliamentary Procedure: Two (2) competitors of the team may have competed in this event at a previous NLC; however, they may not compete more than twice at the national level.
  • Pilot Event: Competition in a pilot event does not disqualify a competitor from competing in the same event if it becomes an official competitive event. The participant may compete in another event as well as a pilot event.

Breaking Ties

  • Objective Tests: Ties are broken by comparing the correct number of answers to the last 10 questions on the exam. If a tie remains, the competitor who completed the test in a shorter amount of time will place higher. If this does not break the tie, answers to the last 20 questions will be reviewed and determine the winner.
  • Objective and Production Tests: The production test scores will be used to break a tie.
  • Objective Tests and Performances: The objective test score will be used to break a tie based on the tie-breaking criteria of objective tests.
  • Reports/Projects and Performances: The report/project scores will be used to break a tie.
  • Performances: Judges must break ties and all judges’ decisions are final.

National Deadlines

  • State chair/adviser must register all competitors for NLC competitive events online by 11:59 p.m. Eastern Time on the second Friday in May.
  • All prejudged components (report PDFs, resume/letter of application PDFs, and project URLs) must be received by 11:59 p.m. Eastern Time on the second Friday in May.
  • All URLs and PDFs for prejudged projects and reports will be submitted by the state adviser via the competitive events registration form.
  • All production tests must be received at FBLA-PBL by 11:59 p.m. Eastern Time on the third Friday in May.
  • Desktop Publishing—the finished product must be uploaded in PDF format by 11:59 p.m. Eastern Time on the third Friday in May. Label all documents with the event title, competitor’s name, state, and school.
  • All production tests must be uploaded online.
  • State chair/adviser may make name changes only (no additional entries) by 11:59 p.m. Eastern Time on the first Friday in June. Competitor drops are the only changes allowed after this date and onsite.

National Awards

The number of competitors will determine the number of winners. The maximum number of winners for each competitive event is 10. Only one (1) award is given to the schools competing in chapter events (Community Service Project and Local Chapter Annual Business Report).

Additional Materials

  • Financial calculators may be brought to objective testing and used for any accounting, finance, or analysis & decision making events.
  • Certain events may allow the use of additional materials. Please refer to event guidelines.

Americans with Disabilities Act (ADA)

FBLA‑PBL meets the criteria specified in the Americans with Disabilities Act for all participants who submit a special needs form.

Recording of Presentations

No unauthorized audio or video recording devices will be allowed in any competitive event. Participants in the performance events should be aware the national association reserves the right to record any performance for use in study or training materials.

Graduate Students

Graduate students may compete in all PBL events.


General Competitive Events Tips
Event Tips
Format Guide

Insurance Principles
1. Define insurance as a risk transfer mechanism.
2. Define utmost good faith, insurable interest, indemnity, contribution, subrogation and proximate cause.
3. Explain the basis of insurance as a risk transfer mechanism.
4. Describe the role of insurance in society.
5. Explain the difference between perils and hazards.
6. Describe the types of homogeneous risks covered by an insurance pool.
7. Explain the difference between assurance and insurance.
8. Recommend insurance for the types of risk commonly faced by various age groups
9. Understand risk retention plans and risk financing transfers.
10. Determine the cost of risk.
11. Explain the insurance business cycle (agent, underwriter, claims, settlement).
12. Explain claims management.
General Insurance Concepts
1. List major types of insurance and the coverage for each type of insurance.
2. Demonstrates knowledge of common insurance terms.
3. Describe features that can affect the underwriting and pricing of insurance products.
4. Explain the policy life cycle.
5. Recognize basic policy types and basic policy features.
6. Explain the role of the insurance broker.
7. Define insurance premiums.
8. Explain insurance policy exclusions.
9. Explain accidental death benefit.
10. Describe the role of the insurance adjuster.
11. Differentiate the role of an independent insurance agent and a direct agent.
12. Define annuities associated with insurance
13. Explain casualty insurance.
14. Define coinsurance.
15. Explain the need for comprehensive insurance.
16. Explain convertible life insurance.
17. Define elimination period.
18. Explain how a deductible works.
19. Explain the floater clause for homeowner and renter’s insurance policies.
20. Define grace period for a life insurance policy.
21. Describe the relationship between a hazard and a possible loss.
22. Explain insurable interests.
23. Explain situations that require Lloyds of London, England insurance.
24. Explain the loss control process.
25. Define mutual insurance companies.
26. Describe the relationship between a peril and insurance.
27. Explain the relationship between a tort and insurance.
Automobile, Homeowners, Renters, Property, & Liability Insurance
1. Define bodily injury liability, medical payments, and comprehensive automobile insurance coverage.
2. Define a deductible and explain how it impacts price of the automobile insurance.
3. Explain insurance concepts: insured, insurer, insurance policy.
4. Describe perils that need insurance coverage.
5. Explain how automobile insurance premiums are impacted by level of risk and the number of claims made by the insured.
6. Differentiate between the main types of automobile insurance coverage.
7. Calculate the amount paid on insurance claims after applying exclusions and deductibles.
8. Understand the basics of a homeowner insurance application.
9. Recognize what factors impact home insurance rates.
10. Define the steps to take when filing a homeowner insurance claim.
11. Explain the insurance coverage provided by renter’s insurance.
12. Define liability insurance.
Life, Health, & Disability Insurance
1. Understand life insurance contract vocabulary.
2. Describe different types of life insurance policies.
3. Highlight components of different life insurance policies.
4. Define different types of health insurance coverage.
5. Identify health care challenges in the United States.
6. Understand government insurance programs (COBRA, HIPAA, Medicare, Medicaid).
7. Compare universal life insurance to term insurance.
8. Describe the best candidates for universal and term life insurance.
9. Explain convertible life insurance.
10. Explain worker compensation benefits.
Legal Concepts
1. Explain laws that can affect insurance practice.
2. Explain how insurance can meet a specific legal requirement.
3. List the requirements for a valid insurance contract.
4. Explain the law of torts and its relationship to insurance.
5. Know the code of ethics that insurance professionals must follow.
6. Understand the basics of contract provisions.
7. Explain legal concepts pertinent to the insurance industry.
Compliance & Operational Risk
1. Explain the purpose for insurance regulation.
2. Demonstrate an understanding of professionalism and ethical behavior.
3. Explain the importance of capital adequacy and solvency.
4. Describe good customer service in the insurance industry.
5. Define the role of underwriting in the insurance industry.
6. Explain the role of an insurance rating company.
7. Explain conflict of interest.
8. Describe the importance of customer confidentiality.
9. Explain the long-term value of good customer service.
Assessing & Transferring Risk
1. Recognize the role of underwriting in relation to the transfer of risk.
2. Describe the relationship of the insurance market and the transfer of risk.
3. Demonstrate an understanding of different risk profiles.
4. Explain the insurance underwriting process.
5. Define information required to underwrite a risk.
6. Explain underwriting and rating factors for different types of risk.
1. Identify insurance industry jobs.
2. Recognize industry organizations.
3. Describe essential knowledge and skills needed to be employed in the insurance industry.
4. Describe roles and responsibilities in insurance (underwriter, insurance sales representative, actuary, claims personnel, loss control specialist).
5. Describe insurance licensing and certification programs.
Ethics in the Insurance Industry
1. Explain full disclosure and the ethical issue of fine print.
2. Describe ethical leadership in the insurance industry.
3. Describe consequences for unethical behavior in the insurance industry.
4. Explain the public perception of ethics in the insurance industry.



Competitors must be registered for NLC and pay registration fee.
Competitors must pay dues by 11:59 p.m. Eastern on April 15.
States may submit up to 3 entries.


Test: 1 hour